Web Marketing Tax Tips and Tricks

The belief that Online Marketing is a tax free industry is basically the worst and most dangerous misconception in the market. Folks get into IM convinced that because they are generating an income online and being paid through, mostly, PayPal--they don't have to pay taxes on that money. It's totally bogus! Most importantly, failing to pay taxes on this income can land you in a lot of trouble. Don't freak out, though: it isn't hard to do taxes when you are an online marketer. Here are a few ideas that will help you.

1. Obtain an appointment at your local Small Business Association. All communities have some form of small business helping association or organization (typically run via a local community or city college) that has a lot of trained experts on hand to help you both set up your business and make certain that all of your tax issues are carefully and correctly taken care of. The wonderful thing is that this resource is almost always cost free.

2. Keep track of just about every little thing. Say it once again: keep an eye on every single last detail. Excel makes this simple enough. Create a spreadsheet and record every last cent you make with your Internet Marketing business in addition to one that tracks every single cent you spend on your IM efforts. Be sure to keep receipts and invoices for all of the money that you pay out.

3. In case you have more than enough funding, work with a professional accountant. By doing this you don't have to worry about the numbers and taxes part of your business. You tell your accountant what you've generated and put in (be sure to have documentation for proof) and they do the rest.

4. Pay toward the taxes you are going to owe throughout the year. A good principle is to pay 30% of each sale. You can do this quarterly through Estimated Tax Payments with the IRS or you could even do this monthly. The IRS is right now set up well enough that they can receive estimated tax payments from you when you feel like making them. This way you'll not have an eye popping number that you owe at the end of the year (which will be particularly stressful if you haven't saved up for it). What's great is that if you pay too much through your estimated tax payments, you'll receive a refund like you would by paying taxes with a traditional job. Be sure to speak with somebody at the IRS to get this set up properly.

5. Learn which write-offs you're permitted to take. When you run your own business from home, there are a lot of things, like the money you pay in for utility payments, that become tax deductible--just like paying for other business related supplies. Your accountant or a representative from the IRS can help you discover which deductions you can claim at tax time.

It isn't all that hard to become intimidated by the idea of having to pay taxes when you are an Internet Marketer. The good thing is that there are many resources that will help you ensure that you don't get in trouble with the IRS and that you could keep a healthy portion of the profits that you bring in. External Keyword Tool